How to get a great credit score

December 18th, 2007 Posted in Business Loans - Info

When it comes to maintaining a good credit score, you are your own best resource. Here are some valuable tips to help make you get the best credit possible:

Pay bills on time. Always make consistent and timely payments, nothing is more important.

Have a few credit cards - and manage them responsibly. Credit cards and installment loans that you pay on time will raise your score. The longer and account is open and paid on time, the higher your score will be.

Maintain low credit card balances realtive to the maximum credit limit on that particular card. Some experts advise not to use more than 50% of your limit on any one card.

Rotate and use all of your credit cards. Contrary to popular belief, a dormant account does not help your credit score.

Never use credit cards to pay other credit cards. It’s better to pay down those you have. Always start paying down the card(s) with the highest interest rate, and then move to the cards with the highest balance.

Don’t open multiple accounts at the same time. Too many credit report inquiries lower your score and increase your credit risk.

Don’t have too many credit card accounts that you don’t need. A lot of available credit lowers your score and increases your credit risk.

Work with your creditors. A telephone call to explain why your payment will be late may prevent a delinquency from being reported.

Know your FICO score. FICO scores range from 300 to 850. Scores of 720 and above are considered top tier. These scores enjoy the best credit options. Conversely, scores of 620 and lower fall into a higher risk category.

Check your credit report for accuracy. You can inquire about your own credit through one or all of the credit reporting agencies (Experian, TransUnion, and Equifax) without it affecting your score.

There are no tricks or quick fixes to getting a good credit score, but you can raise your score over time by demonstrating a consistent history of responsible credit use. With a higher credit score you’ll be able to qualify for better interest rates, higher credit limits, and more types of credit than you would with a low score, so it’s always in your best interest to manage your credit responsibly